Amendments v. Restatement. Amendments are good when you only need a few. At some point, amendments are problematic because they are often overlooked by members and they don't address underlying structural problems with your documents. A restatement is a little more expensive but gives you a clean up-to-date document. It's a complete replacement of your existing CC&Rs and bylaws with an integrated set. Following are some of the major changes you should expect:
Board-Approved Amendments. Both the board of directors and the membership have the authority to amend the Bylaws. The Davis-Stirling Act gives boards the power to unilaterally amend the bylaws (as well as the CC&Rs) without a membership vote to eliminate discriminatory language and revise references to outdated statutory references in the Davis-Stirling Act. (Civ. Code § 4225 and Civ. Code § 4235.)
In addition, in the absence of any provision in the bylaws limiting amendment powers solely to the membership (Corp. Code § 7150(c)), boards have discretion to amend bylaws without a vote of the membership (Corp. Code § 7150(a)) unless the amendment would:
- Materially and adversely affect the rights of members as to voting, dissolution, redemption, or transfer;
- Increase or decrease the number of members authorized in total or for any class;
- Effect an exchange, reclassification or cancellation of all or part of the memberships; or
- Authorize a new class of membership.
- (or would make other types of changes as specified in Corp. Code § 7150(a).)
Membership-Approved Amendments. The voting requirements for membership approval of bylaw amendments and restatements are normally found in an association's bylaws. In the event the bylaws fail to include an amendment provision, they may be amended by a majority of those members voting once a quorum has been established. (Corp. Code § 7150(b).)
1. Initiated by the Board. Amendments to the governing documents are almost always initiated by the board of directors.
2. Secret Ballot. Voting must be done by secret ballot (Civ. Code § 5100(a).) in accordance with written election rules. (Civ. Code § 5105(a).) Unless an association's governing documents provide otherwise, balloting may be done entirely through the mail, with no voting at a meeting. However, counting the ballots is still done at an open meeting so members can observe the counting process. Because voter turnout is a problem, boards can extend the voting period one or more times as needed.
3. Effective Upon Notice. Bylaw amendments and restatements are effective upon notice to the membership. Unlike CC&R amendments, bylaw amendments do not need to be recorded to be effective, nor do they need to be filed with the secretary of state.
Court-Approved Amendments. To seek court approval of bylaw amendments/restatements, a petition needs to be filed under Corporations Code § 7515.
Lost Records. Sometimes written proof of the proper adoption of amendments, rules or architectural guidelines is lost. It may be due to poor record keeping, floods, fires, or turnover of management companies. If at some later date the amendment, a rule or guideline is challenged and no direct evidence of its approval or adoption can be found, associations can present circumstantial evidence that the amendment, rule or guideline had been duly adopted. Unlike direct evidence, circumstantial evidence does not directly prove the fact in question. Instead, circumstantial evidence may support a logical conclusion that the disputed fact is true.
[W]e find no legal support for the... claim that a common interest association is required to provide direct, rather than circumstantial evidence that its use restrictions were properly adopted in an action to enforce the restrictions. (Clear Lake v. Cramer)
Statute of Limitations. The statute of limitations for challenging an amendment is four years. (Code Civ. Proc. § 337) Code of Civil Procedure § 343 provides, "An action for relief not hereinbefore provided for must be commenced within four years after the cause of action shall have accrued."
Amending CC&Rs. For more information, see Amending CC&Rs.
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